While I was out of town last week with my wife, several very interesting issues came into the ETF world; Target Date Funds.
Here’s the List with Tickers and Expense Ratios
|iShares S&P Target Date Retirement Income Fund||TGR||0.31%|
|iShares S&P Target Date 2010 Index Fund||TZD||0.31%|
|iShares S&P Target Date 2015 Index Fund||TZE||0.31%|
|iShares S&P Target Date 2020 Index Fund||TZG||0.31%|
|iShares S&P Target Date 2025 Index Fund||TZI||0.30%|
|iShares S&P Target Date 2030 Index Fund||TZO||0.30%|
|iShares S&P Target Date 2040 Index Fund||TZV||0.29%|
Also iShares has issued 4 new risk-based ETFs
|iShares S&P Conservative Allocation Fund||AOK||0.31%|
|iShares S&P Moderate Allocation Fund||AOM||0.32%|
|iShares S&P Growth Allocation Fund||AOR||0.33%|
|iShares S&P Aggressive Allocation Fund||AOA||0.34%|
How They Work
The underlying indexes of these funds were disigned by S&P to ultize ETFs. Just like other indexes are composed of stocks or bonds, these indexes are composed of nine iShares ETFs. The weights among the different funds are determined by surveying the broad target date mutual fund market, and using each funds peer group to set weights among asset classes.
What Happens at the ‘Target Date’
Once a fund hits its target date it will have the exact allocation as the Retirement Income Fund and shares of the respective fund will be transfered into the retirement income fund and the target date fund will be discontinued two years after after the target date is reached.